After one year in office, Carney's grades are mixed with a lot of 'waiting for results'
OTTAWA — In a federal election last spring that was widely viewed as a watershed in Canadian politics, Mark Carney’s Liberals came back from the political dead to upend a Conservative lead of more than 20 percentage points.
Although a political neophyte, many voters seemed to see Carney as a figure of experience and competence at a time when Canada’s economy was under attack from Washington. Rightly or wrongly, the former central banker was seen as a one-person antidote: to Justin Trudeau, to Pierre Poilievre, and, perhaps most of all, to Donald Trump.
After winning a strong minority, Carney stepped into his new gig with no shortage of challenges: trade woes with the U.S., an economy lagging behind its chief rival, investment and productivity challenges, rising prices on housing, groceries and at the gas pumps, inadequate export infrastructure, separatist threats in Quebec and Alberta, an aging population increasingly frustrated by its health-care systems, and a fiscal picture that meant trying to solve problems by scratching cheques that would just push problems further down the road.
A year later, as Carney marks his first anniversary as prime minister on March 14, it’s time to look back on a dizzying, complicated, frenetic year in Ottawa — and call a few balls and strikes.
Despite Trudeau’s Liberals showing plenty of signs just over a year ago that they were tired and adrift, the Carney government has moved quickly to take steps on a number of big fronts: infrastructure, defence, housing and, most of all, trade. While Canadians clearly want to see more results, an increasing number seem to be on board, or at least satisfied, with the government’s direction and Carney’s performance.
A Postmedia-Leger poll released last week gave the Liberals a 14-point lead over the Conservatives, which is in line with other recent polls and leaves the governing party about a dozen points ahead of where they ended up after last April’s federal election.
Whether aided by strong leadership, policy preferences, or unabashed opportunism, the Liberal ranks have also been bolstered by a total of four floor-crossers from the Conservative and New Democratic caucuses. With the governing Grits expected to win at least two of the three byelections on this spring’s calendar, the defections leave Carney’s Liberals on the precipice of a parliamentary majority.
But opinion polls and horse-race headlines are very different from more jobs, new houses and roaring blast furnaces at Canadian steel mills.
To mark Carney’s first anniversary, National Post has decided to provide the prime minister and his Liberal colleagues with a one-year report card.
The exercise will attempt to judge Carney and his government primarily on tangible results, but will also try to recognize where legitimate steps have been taken on issues that require longer-term fixes.
Fiscal Policy
Like with environmental policies, Canada’s fiscal situation has been sacrificed for other priorities, namely investing in the economy.
Carney has increased spending on such items as defence and security, while making modest income tax cuts and cancelling the consumer carbon tax and the digital services tax.
For those hoping for a smaller deficit, the math doesn’t work.
In its first budget last fall, the Carney government projected a deficit for this fiscal year of $78.3 billion, the third-highest in Canadian history and the largest ever in a non-pandemic year.
The government also forecast an average deficit of $64.3 billion between this fiscal year and 2029-30, more than double what was projected about a year ago in the 2024 Fall Economic Statement.
Despite the frequent efforts of Finance Minister François-Philippe Champagne to compare Canada to countries in worse fiscal situations, there’s no angle that makes the picture look any prettier.
Ottawa has now accumulated a total of $1.27 trillion in debt, about $593 billion of which has been amassed over the last five years, or 46.7 per cent of the total debt accumulated in Canadian history.
“This is maybe the worst I’ve seen (the fiscal landscape),” said Brian Lee Crowley, managing director of the Macdonald-Laurier Institute think tank. “They’ve completely fumbled the ball.”
Grade: D
Trade
If there’s one thing that Carney has made clear in his first year in office, it’s that the government’s number one goal is to grow Canadian exports.
That can be accomplished in a number of ways, but Carney has focused largely on trying to open up or expand foreign markets, secure existing ones, improve competitiveness through efficiencies, and reduce inter-provincial barriers.
It’s tough to fault Carney on either his effort or ambition as he travelled the globe looking for markets to help alleviate the losses from Trump’s tariffs.
Much of Carney’s focus has been on easing the tension and the trade restrictions between Canada and the world’s two most populous countries. The Trudeau government had frosty relations with both India and China, and Carney clarified that it was time to get over the problems and start selling lentils.
Characteristically strategic in his approach to the relationship woes, Carney started with phone calls, brief conversations on the sidelines of international gatherings and, in the case of Indian Prime Minister Narendra Modi, an invitation to attend a G7 summit in Kananaskis, Alta., last June. Not only is India not a G7 member, Modi’s government has been accused by Canada of extortion, coercion and even murder.
Progress has clearly been made on both the Indian and Chinese fronts.
After Carney’s meetings with Modi in Delhi earlier this year, the two countries agreed to work toward better relations on security, critical minerals, technology and improved trade, including a plan to push ahead with a free-trade deal by the end of the year.
Less than two months earlier, Carney had reached agreements in Beijing with Chinese President Xi Jinping on tourism, cultural exchanges, improved diplomatic relations and a reset of the trading relationship. It was agreed that the reset will start with lower tariffs on Canadian exports of seafood, canola and other agricultural products, in exchange for allowing about 49,000 Chinese electric vehicles (EVs) into the Canadian market at a reduced tariff of about 6.1 per cent.
Carney has also racked up the frequent flyer points while inking trade or industrial deals with Australia, Qatar, Indonesia and the European Union. He signed a partnership deal in Japan on defence, energy, trade and technology and visited at least 19 other countries.
And then there’s Trump’s America, where Canada typically sells a little more than three-quarters of its exports.
Convinced that tariffs are the path to economic salvation, Trump has erected trade barriers on key Canadian sectors, declaring that his country doesn’t need anything produced on this side of the border. Constantly on the lookout for leverage, he’s also made a wide range of threats about new or hiked tariffs and the looming review of the North American free trade deal that is due this summer.
Ottawa has made a trade deal with the U.S. a top priority, but hasn’t yet cracked the art of that deal.
Crowley, of the Macdonald-Laurier Institute think tank, said the Carney government deserves criticism for losing its focus at times over the last year by reacting too often to Trump’s latest bombast.
“We’ve fallen into Trump’s trap over and over again,” he said.
Progressive Sen. Peter Harder has a different view, saying he gives the Carney government credit for its efforts to advance trade around the globe and not falling into Trump’s trap to sign a bad trade deal.
It’s a hot topic in Ottawa circles these days whether a deal with the U.S. is even possible at this time.
But auto and steel workers, however, don’t really care and Carney made negotiating with Trump a key part of his pitch to voters last year, so that omission has to be considered in the grade.
Grade: B-
Affordability
Prices of consumers’ key items – food, gas and shelter – have mostly remained stable over the last year, with the recent pump price spike since the war in Iran being the notable exception.
But overall, prices, a primary campaign theme of the opposition Conservatives, have been stable in recent months. The latest consumer price index (CPI) figures show that prices were up 2.3 per cent in January compared to a year earlier, which tucks comfortably into the Bank of Canada’s preferred band for modest inflation.
And the Carney government can take some credit for affordability not getting any worse (in “real” or inflation-adjusted terms).
One of the prime minister’s first moves was to cancel the consumer carbon tax. The government also cancelled the digital services tax, cut income taxes modestly and have made some efforts to reduce inter-provincial trade barriers that economists say have been robbing the Canadian economy for decades. And earlier this year, they continued the Trudeau-era strategy of dealing with inflation by sending out cheques, this time a new program called the Canada Groceries and Essential Benefit that included a top-up payment equal to 50 per cent of the annual GST credit.
But, troublingly for the Liberals, food inflation in Canada has been the highest in the G7, which is a message the Conservatives have been hammering home in the House of Commons. Even more troubling for Carney is that grocery prices will continue to rise at an elevated level.
Inflation figures also show that prices shot up dramatically during the pandemic and, even though supply-chain issues have long been resolved, have not fallen back. Housing, the biggest component in most consumers’ budgets, remains unaffordable or prohibitive for millions, particularly young Canadians.
The Carney government deserves some credit for its efforts to make life more affordable, but it could certainly have gone further.
Grade: C-
Climate / environment
Carney entered politics with a reputation for being a member of a rare breed who was both an internationally renowned financial expert and someone who cared strongly about the environment. He had done substantive work on the intersection between finance and environment policy and even written a book about it.
While governor of the central banks in Canada and the United Kingdom, Carney tried to emphasize the economic risks posed by climate change. Later, in 2019, after leaving those banker jobs, he was appointed the United Nations’ Special Envoy on Climate Action and Finance. His tasks included encouraging private investment towards climate solutions.
As prime minister, however, it was a different story – right from the start.
On his first day in office, Carney fulfilled a campaign promise by announcing the cancellation of the consumer carbon tax, which had been implemented by his predecessor as a deterrent to the use of gas and other carbon-based fuels.
Since then, Carney has moved away from EV mandates, towards consumer rebates, while halting the federal fossil-fuel emissions cap and supporting new oil infrastructure.
The government has maintained or advanced some environmental commitments, such as the goal of protecting 30 per cent of all land and water by the end of this decade.
But overall, while some analysts credit the prime minister for his pragmatism in focusing on the country’s most pressing issues, environmentalists say Carney’s first year in office has been a step back. Green Party Leader Elizabeth May even offered to buy Carney a book on the subject — his own.
For further proof, look no further than the cabinet resignation of Steven Guilbeault, a longtime environmental activist and Trudeau’s former environment minister. Guilbeault quit Carney’s cabinet in November after the new prime minister signed an agreement with Alberta to pursue a deal on energy and pipelines.
Carney seems to have accepted that environmental policies are not the priority — at least for now.
Grade: D
Economic growth and standard of living
This sprawling category needs to include any number of complex but important issues: competitiveness, innovation, foreign investment, domestic corporate investment and inter-provincial free trade. And of course some of the other categories, such as trade and fiscal policy, directly affect economic growth too.
But for most Canadians, a growing economy means jobs, higher wages and an improving standard of living. On those basic measures, like many things economic, it’s less than crystal clear.
Real wages, pay changes compared to inflation, improved slightly in 2025 after a few years of sluggishness, although there’s still a long way to go to catch up to the buying power losses from the pandemic inflation.
Unemployment and inflation have been in relatively good shape in Canada, although food and housing prices remain thorny problems and on Friday Canada’s unemployment rate rose to 6.7 per cent in February, following the loss of 83,900 jobs.
For Canadian business, there’s been a little relief, for example, beyond tepid changes to capital cost allowance (CCA) treatment. But Carney has so far resisted taking any big swings to support business competitiveness, such as a dramatic cut to payroll or corporate income taxes.
So, when considering the effects of the Trump tariffs on some of Canada’s major industries, the Canadian economy has endured the last year in decent shape.
On the other hand, if we compare many of the broader economic metrics to our peer countries, including GDP per capita, considered a reasonable measure of a country’s national standard of living, we’re falling behind many of our counterparts and have been for years.
Tim Sargent, head of domestic policy for the Macdonald-Laurier Institute think tank, said Carney understands the challenges but hasn’t yet taken the big steps necessary to make a big difference. “I think he gets the problems.”
The Carney government’s support in the opinion polls suggest that many Canadians think that Ottawa is heading in the right direction and doing pretty well, given the circumstances.
One of the country’s largest business organizations has a similar view. “In his first year, Prime Minister Carney has shown a clear understanding that a strong economy requires strong partnerships with the private sector,” said Goldy Hyder, chief executive of the Business Council of Canada. “Some early moves have been encouraging, particularly around trade and investment.”
But longer-term results, particularly Ottawa’s ability to land a new trade deal with the U.S., will again be key for the government and for Canadians.
“Year two, the proof will be in the pudding,” said Sen. Harder.
Grade: B
Infrastructure
A national consensus seems to have emerged: Canada’s infrastructure – the blocking and tackling for an export-oriented economy – hasn’t kept up.
Roads, railways, airports, pipelines and ports are often too inefficient and expensive to give exporters the advantage and efficiency they need.
Almost comically, adding a new pipeline from Alberta to just about anywhere, or a port in the frozen bog of northwestern Ontario has become national rallying cries.
The Carney government has clearly recognized this need, vowed to make infrastructure decisions more quickly, worked more effectively with provinces and territories, and set up an approval office to advance that cause. But so far, as might be expected for big builds of this nature, it’s been mostly promises, plans and approvals of projects that were already under way more than a year ago.
The government deserves some points for effort here, but that grace, like a shipment of farmers’ produce waiting to get through customs, has an expiration date.
While offering some grace, it also again needs to be pointed out that the Liberals have been in power for most of, well, for most of just about any measurement of post-Confederation time.
It was also a Liberal government under Justin Trudeau, which includes much of the current cabinet and caucus, that made it just about impossible to add infrastructure for big swaths of this country’s natural resources sector, particularly energy producers.
So, as much as they want to paint the Carney era as a fresh start, they need to own their past.
Grade: C+
Housing
Like with infrastructure and some of the other issues that face the Liberal government, Canada’s severe housing shortage is a political misfit in that it doesn’t line up with the electoral cycle: the problem is immediate, elections are usually held every four years or so, but the actual solutions are mostly structural, long-term fixes.
If you’ve ever tried to wrap your head around why there’s been such a supply shortage of a product in such high demand, that may be a decent starting point.
The Carney government has vowed to make increased housing starts, which lead to a wide array of social and economic benefits, a priority. Before the April election, Carney set the ambitious target of building 500,000 homes a year over the next decade. That gives all indications of being one of those easy, long-term political promises that will almost certainly be left for a successor to respond to when it’s not reached. It would mean output of more than double what is now expected for each of the next few years, and a level of residential construction not seen since the years following the Second World War.
In fairness, Ottawa probably ranks third out of the three levels of government when it comes to responsibility for housing stock. It’s mostly a provincial and municipal quagmire, although the feds are responsible for national housing strategies, scratching cheques to provincial non-profits and Indigenous housing.
Economists and other analysts say the root of the problem is largely a lack of supply that can be traced to rising taxes and other input costs, zoning chokeholds, and a tangled web of multi-jurisdictional bureaucracy.
Yet one of Carney’s first moves was to launch Build Canada Homes, another layer of government whose value has yet to be determined. The $13-billion program is intended to make it easier and quicker to build homes, especially less costly units for middle- and lower-income Canadians.
Crowley said Ottawa is mostly engaged in housing in its rhetoric and should instead focus on the systemic issues causing the problems.
While many who follow the Canadian housing sector closely say that Ottawa’s target for new homes seems like a pipe dream, there was at least some encouraging evidence this week. Canada Mortgage and Housing Corporation (CMHC), a Crown corporation that acts as the country’s national housing agency, reported that housing starts jumped six per cent in 2025, largely due to increases in rental apartments and in the “middle housing” category that includes low-rise apartments and multiplexes.
We can give the government a little slack on this issue. But their target, like the challenge, isn’t going away any time soon.
Grade: C+
Defence and security
Like many NATO members, Canada was for decades reluctant to hit the alliance’s target for defence spending of two per cent of gross domestic product (GDP).
The tactic to avoid that spending seemed to be based on two basic lines of logic. One, if the Americans ever invaded their neighbour to the north, there’s realistically not that much we could do. If anybody else ever invaded Canada, the Americans would for their own interests step in.
But the defence and security equation became more complicated for Canada and its NATO allies in recent years as digital threats became more prominent and then changed further early last year when Trump returned to the White House. The U.S. president wanted to cut overseas defence spending that he deemed unnecessary and mocked allies for not picking up their own bills. He also showed considerable empathy for the authoritarian leaders of other large countries and advanced a theory of regional dominance that made Canadians and others in the Western hemisphere nervous.
The new approach from Washington had an immediate effect in Ottawa and other western capitals.
Carney’s government pivoted quickly, stepping up with increased spending plans that will shortly bump Canadian defence spending above the two per cent target. Critics of the new position, which included pay hikes for military personnel, have been few and far between.
That’s unlikely to be the case when the government eventually chooses a vendor for new fighter jets and other big-ticket defence items, even if it gives the government some possible leverage in trade talks with Washington.
Grade: B+
Bottom line
The Carney government can’t be accused of lacking ambition or energy.
Led by a prime minister who prides himself on being a pragmatist who gets things done, the government has had a busy first year where deep-rooted and difficult problems have been attacked with admirable vigour.
Supporters and detractors largely agree that the government’s first year was productive in shifting gears from the Trudeau years and taking important early steps on a number of files.
But good intentions and political energy are not the same as Canadians being able to afford minor hockey or opening the front door of their own home.
“They get an ‘A’ for effort,” said Sargent, “but we’re still waiting for results.”
On those more tangible and important metrics, the government doesn’t score as well, in part because so many of the country’s problems aren’t easy, short-term fixes and, in some cases, are functions of the whims of Donald Trump and others.
“Year one was about setting the direction,” said Hyder. “He has an opportunity in his second year to deliver outcomes.”
And unlike some new governments, the Carney crew doesn’t get a fresh reboot by simply pointing political fingers at their predecessors.
The new boss may not be the same as the old boss, but the Liberals still need to be held accountable for major problems such as our massive national debt and infrastructure woes that have been kicked down the road year after year. The “natural governing party” has dominated Canada’s political landscape for generations, like few parties in the western world. They’ve been in power for the last 11 years, 24 of the last 33 years (73 per cent of that period), and 55 of the last 81 (68 per cent).
If there’s a mess, they own most of it.
National Post
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